Spinning Top Candlestick Pattern: What It Means & How to Trade It

Traders are always searching for clues about where the market might head next. The Spinning Top candlestick pattern is one of those signals that suggests indecisiveness in markets, reflecting a balance between buyers and sellers.

This common candlestick pattern appears when neither side gains absolute control, leaving the market in a state of uncertainty. While this single candlestick pattern doesn’t provide a direct price action confirmation, it can act as a valuable tool for traders looking for potential price reversals and a shift in market sentiment.

This guide explains how the Spinning Top pattern works, what it tells traders about market direction, and how it can be used in successful trading.

The Spinning Top is a technical indicator that signals market indecision. It has a wafer-thin body with long upper and lower wicks, showing that the price fluctuated significantly but closed near its opening price.

This pattern forms when aggressive traders push the price up and down, but by the close, neither side secures dominance. While it does not confirm an upcoming reversal, it suggests that the ongoing trend may be losing strength.

Key Characteristics:

• Forms in both bull markets and bear markets
• Small real body, meaning the open and close prices are close together
• Long upper wick and lower wick, indicating significant price fluctuations
• Signals market indecision rather than a strong move in either direction
• Requires confirmation candles before making informed trading decisions

Traders use this technical analysis tool to spot potential trend reversals, but it needs price action confirmation before executing trades.

The Spinning Top candlestick pattern is illustrated below.

• • Forms in both uptrends and downtrends.
  • Small real body, showing little difference between the open and close price.
  • Long upper and lower wicks indicated significant price movement during the session.
  • Suggests market indecision, as neither buyers nor sellers took control.

The Spinning Top represents a sign of indecision between bullish traders and bearish traders. The price swings during the trading session, yet neither buyers nor sellers establish clear dominance.

In a bullish market, this pattern may indicate that bullish spinning tops are losing momentum, potentially leading to a bearish reversal pattern. In contrast, during a bear market, it suggests that bearish pressure is weakening, increasing the possibility of a bullish reversal pattern.

Market Conditions

The Spinning Top is most useful when it forms after a strong bullish trend or bearish trend, as it indicates that momentum is fading. If it appears at key price levels, it suggests that either bullish formation or bearish reversal signals may develop.

Volatility Considerations

In volatile markets, the Spinning Top may produce false signals, as sharp price fluctuations can create misleading upper shadows and long-legged doji formations. Traders often use trend lines and additional indicators to confirm the potential shift.

• No follow-through movement: If the subsequent candle does not confirm a potential trend reversal, the pattern is unreliable
• Breakout in the opposite direction: A strong price reversal against the expected movement invalidates the signal
• Sideways trading conditions: In rangebound markets, the Spinning Top may reflect normal market movements rather than a genuine trading opportunity

To integrate the Spinning Top into a responsive trading strategy, traders should:

1. Identify a strong uptrend or long-term downtrend before the pattern forms
2. Detect a candlestick formation with a narrow range and tall shadows
3. Use technical tools like trend lines, Volume analysis, and standard deviation lines
4. Require confirmation candles before executing trades
5. Backtest historical trading prices before using real capital

Below is a simple AFL script to detect the Spinning Top in Amibroker, useful for options auto trading and trading platform automation:

// Spinning Top AFL Code for Amibroker

_SECTION_BEGIN(“Spinning Top”);

BodySize = Abs(Open – Close);

UpperWick = High – Max(Open, Close);

LowerWick = Min(Open, Close) – Low;

SpinningTop = 

    (BodySize < 0.2 * (High – Low)) AND 

    (UpperWick > 0.3 * (High – Low)) AND 

    (LowerWick > 0.3 * (High – Low));

PlotShapes(IIf(SpinningTop, shapeStar, shapeNone), colorBlue, 0, High);

_SECTION_END();

This script identifies Spinning Tops and marks them with a blue candle.

The Spinning Top candlestick is a valuable tool that reflects market indecision. It appears in stock charts when bullish traders and bearish traders are equally strong, often signaling a subtle shift in momentum.

While it can indicate a bullish reversal or bearish reversal, traders should always wait for subsequent price action to confirm the initial signal. Combining this technical analysis tool with risk management strategies and market context improves accuracy.

Links to articles about other Candlestick Patterns

1. Doji
2. Hammer
3. Inverted Hammer
4. Bullish Engulfing
5. Bearish Engulfing
6. Morning Star
7. Evening Star
8. Shooting Star
9. Hanging Man
10. Piercing Pattern
11. Dark Cloud Cover
12. Three White Soldiers
13. Three Black Crows
14. Dragonfly Doji
15. Gravestone Doji
16. Spinning Top
17. Marubozu
18. Tweezer Top
19. Tweezer Bottom
20. Bullish Harami 
21. Bearish Harami
22. Rising Three Methods
23. Falling Three Methods
24. Bullish Abandoned Baby 
25. Bearish Abandoned Baby 
26. Bullish Kicker 
27. Bearish Kicker
28. Three Inside Up
29. Three Inside Down
30. Upside Gap Two Crows
31. Mat Hold
32. Upside Tasuki Gap
33. Downside Tasuki Gap